New Mexico program will buy down interest rates for home buying
NEW MEXICO (KRQE) – As home prices are trending higher, the push for more affordable housing remains a priority for state leaders. One organization is using taxpayers’ dollars to make home-buying a reality for more New Mexicans.
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Housing advocates said the combination of home costs, interest rates, and rising prices for just about everything has put owning a home out of reach for many New Mexicans. Housing New Mexico is trying a new approach to help.
As home prices increase, Housing New Mexico said wages aren’t keeping up, and that’s where they come in. “Our mission is to try to help housing, help people have affordable housing,” said Jeff Payne, Chief Lending Officer, Housing NM.
The organization’s latest initiative is putting $5 million from the New Mexico Legislature to buy down interest rates for home buyers in the state, effectively lowering interest rates for qualifying buyers. “We’re trying to serve working families, low to moderate income home buyers,” said Payne.
According to the Federal Reserve, the average 30-year fixed mortgage rate in April is about 6.3%, but that fluctuates day to day. This program will help as many as 400 home buyers decrease their rate by up to 1% if they purchase a new construction home. The buy down rate would be permanent for the entirety of the loan. Housing New Mexico said that could reduce mortgage monthly payments by an average of $180 a month.
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Nonprofit Homewise, which offers similar programs like a lower rate program and down payment assistance. “We’re going into our busy time of the year right now, and we’ve actually had quite a bit of clients that are kind of coming out and trying to buy something because rents are also incredibly high,” said Brennan Posen, Qualifying broker, Homewise.
They said a lot of people don’t realize just how much the interest rate affects their monthly payment and how credit plays a key role. “I think a lot of people are more price-conscious than sticker-shocked by rates. You know, if we can match them within that payment and still get them into a better situation than they’re in, that’s our main goal,” said Posen.
“The education is really, really a big piece because not a lot of people understand what home buying all is about. Most of clients, even myself, we’ve actually rented, and it gets expensive, and understanding a little bit more on that home side and just learning that purchasing side,” said Lee Santillanes, Processing manager, Homewise.
The New Mexico Realtors’ Association has data that states the average sale price of a home in the state is $420,000, up more than $100,000 from five years ago in 2021.
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